March 2025 Edition

Newsletter: March 2025 Edition
All the information in this letter is NOT to be considered financial advice; it is the author’s personal view and agreed views of others from their overviews of present markets. This content includes a summary of articles that I believe to be insightful and data that has been verified. The purpose is to provide content that is of interest and relevance to MarginCall.Club members.

Welcome to the March 2025 Edition of the MarginCall.Club FinTech Newsletter

This month, we’ll review the key financial events of February 2025 and explore their potential impact on March and beyond. As always, our goal is to provide you with timely, relevant insights to help you navigate the market effectively.

Financial Market Highlights – February 2025

1. Stock Market:
   • Dow Jones Industrial Average (DJIA): Closed February at 46,780, up 1.15% for the month, buoyed by strong retail earnings and tech sector resilience.
   • S&P 500: Ended at 6,145.20, gaining 2.2%, driven by optimism in consumer spending and AI-related growth.
   • Nasdaq Composite: Closed at 20,410.50, up 2.3%, with semiconductor and software stocks leading the charge.
2. Economic Indicators:
   • GDP Growth: Final Q4 2024 estimate confirmed at 2.6%, with early Q1 2025 projections holding steady around 2.5%.
   • Inflation: February CPI rose to 2.2% year-over-year, with core inflation steady at 2.5%.
   • Employment: Unemployment held at 3.5%, with robust job growth in technology and renewable energy sectors.
   • Interest Rates: The Federal Reserve maintained rates at 4.25% – 4.50% in February, hinting at a possible cut in Q2 2025 if inflation cools further.
3. Cryptocurrency Update:
   • Bitcoin (BTC): Closed February at $82,500, down 19.3% from January’s $102,084 high, as profit-taking and macroeconomic uncertainty triggered a sharp sell-off.
   • Ethereum (ETH): Ended at $2,280.40, down 2.4%, impacted by broader crypto market volatility.
   • Regulatory Developments: The SEC continues to monitor spot Bitcoin ETF performance, with trading volumes reaching record highs.
   • DeFi and NFTs: NFT gaming projects saw a resurgence, though overall DeFi activity moderated amid the crypto dip.
4. Geopolitical and Macroeconomic Factors:
   • Geopolitical Tensions: U.S.-China trade talks stalled, while Middle Eastern supply chain disruptions pushed energy prices higher.
   • Energy Prices: Crude oil averaged $78 per barrel, up from January’s $75, due to geopolitical risks and seasonal demand.

Key Events to Watch in March 2025

1. Federal Reserve’s March Meeting: Investors will scrutinize the Fed’s tone for hints of a dovish shift later in 2025.
2. Q1 2025 Corporate Earnings: Early reports from energy and industrial sectors will signal broader economic health.
3. Crypto Market Recovery Signals: Bitcoin’s response to its recent drop will dictate short-term sentiment.

Market Sentiment and Investment Insights

1. Cryptocurrency Market
   Bitcoin’s February drop to $92,500 reflects profit-taking after its $102,084 peak, with support now tested near $90,000. Analysts remain cautiously optimistic, eyeing a rebound to $100,000+ in March if macroeconomic fears subside.
2. Key Market Threats – March 2025
   • Persistent inflation above 2% could delay Fed rate cuts, pressuring equities and crypto.
   • Escalating geopolitical conflicts may drive oil prices higher, impacting global markets.
   • Weakness in Bitcoin below $90,000 could trigger further liquidations.
3. Bitcoin Technical Analysis: Cup & Handle Pattern
   Despite the recent drop, Bitcoin’s weekly chart still supports a cup-and-handle formation. The $275,000 target by August/September 2025 remains intact, though a deeper pullback to $85,000 could precede the next leg up. A rally past $500,000 by October 2025 aligns with halving cycle trends.

Updated Q&A Section

Q: Why are yields still elevated, and what’s driving swap spreads in March?
A: The key factors include:

1. Treasury Issuance and Demand-Supply Imbalance:
   • U.S. debt issuance remains high, with yields reflecting supply pressure despite steady institutional buying.
2. Federal Reserve Policy and Market Volatility:
   • The Fed’s neutral stance amid the Bitcoin drop and mixed inflation data has kept fixed-income markets choppy.
3. Geopolitical and Fiscal Uncertainty:
   • Rising energy costs and U.S.-China friction sustain risk premiums.
4. Liquidity Constraints:
   • Crypto market turbulence has spilled over, with hedge funds adjusting bond positions.
     Summary: Yields may stabilize by mid-2025 if the Fed pivots dovishly and Bitcoin regains traction, easing market jitters.

Final Thoughts on Crypto

As we enter March, the Bitcoin price drop has shifted focus to resilience and recovery potential. Global markets remain sensitive to Federal Reserve signals, energy price shocks, and geopolitical developments. Cryptocurrencies, despite short-term setbacks, continue to position themselves as viable hedges against macroeconomic uncertainty.

Stay tuned for further updates, and remember: well-informed decisions are the foundation of strong financial outcomes.

My Thoughts on the Coming Month

The Bitcoin price drop in February has sparked debate about its trajectory under Trump’s administration. Here are my updated insights:

Deductions:

1. U.S. Debt Crisis:
   • National debt now exceeds $40 trillion, amplifying fiscal pressures.
2. Strategic Loss in 2024:
   • Democrats’ 2024 concession may still reflect a calculated move to sidestep this crisis.
3. 2028 Comeback Strategy:
   • A high-profile Democratic candidate, possibly Michelle Obama, could emerge in 2028.

Opinions:
Trump’s Bitcoin Strategy:

• Plans to acquire 1 million BTC over five years remain in focus, though the recent drop tests resolve.
• Bitcoin’s role as a national asset to offset debt risks is gaining bipartisan attention.

Potential Plan:

• Year 1: Accumulate 200,000 BTC (~$18.5 billion at current prices), leveraging the dip for dollar-cost averaging.
• Subsidize domestic Bitcoin mining to secure supply amid market volatility.

Long-Term Vision:

• By 2028, Bitcoin could hit $1M+ if adoption accelerates, significantly easing U.S. debt burdens.
• The February drop may delay but not derail this outlook.

Final Thoughts
The Bitcoin sell-off introduces short-term uncertainty, but the broader vision remains plausible. I now rate this plan’s probability at 60/40 in favour, down slightly from 65/35, reflecting market headwinds but sustained political momentum.

Watch out for a >$72,000< Bitcoin with a bounce back to >$89,000<

Regards,
James